Simon Hoyle has been a finance journalist for more than 25 years – a finance journalist because the football and motorsports rounds at The Age were filled when he was awarded a cadetship. He worked on BRW and Personal Investment magazines, and was part of the team that launched Money Management. Hoyle spent 11 years at the Australian Financial Review before moving on to be an investment writer for The Sydney Morning Herald and The Australian. He was appointed editor of Professional Planner in November 2007.

Glenn Freeman is a senior journalist for Professional Planner. He has around three years’ experience in financial services journalism, having also covered broader areas of business including M&A activity and energy. His journalistic experience includes five years spent abroad, where he was editor of an oil and gas title in the United Arab Emirates along with other in-house and freelance projects, which included stints in motorcycle and automotive journalism.

The downsizer rule is the new ‘TRIS’: adviser

New downsizer contributions are set to be as beneficial to people over 65 as the transition-to-retirement income scheme (TRIS) was to pre-retirees, IPAC private client adviser Peter Crump says.

The downsizer rules, set to come into effect on July 1 this year, gives a person aged between 65 and 75 the ability to contribute up to $300,000 into their superannuation as a non-concessional contribution, from the proceeds of selling their own home.

An important omission from the legislation is the requirement that the person actually downsize. This only conditions are that the home must be owned for at least 10 years, and the downsizer contribution must be made within 90 days after the settlement of your home sale. As stated in Treasury’s fact sheet, “You will be able to make a contribution once you sell an eligible home. You do not have to make any subsequent home purchase, and you can move into any living situation suitable for you.”

Crump, who is a former chairman of the SMSF Association, says that the rule is a boon for post-retirees in the same way that transition-to-retirement income streams were for pre-retirees.

“The opportunity is likely to have the same degree of interest as the TRIS strategies that were developed,” he explains. “Starting a TRIS made superannuation earnings tax-free earlier than they otherwise would be, whereas this makes it possible for people to put more money into super.

“It reads as a home downsizer contribution, but you don’t need to reduce the value of your home to put in $300,000,” he continues. “There’s nothing to say that you can’t use the full proceeds to buy another house, and make the contribution using separate money that happens to be floating around at the same time. It might only go into accumulation if they’re over $1.6 million but that’s still a much better tax rate.”

For advisers, helping clients take advantage of the downsizer rule will be a huge value-add, Crump says.

“We’re looking at it as the new transition to retirement,” he says. “Well-informed members and the well advised will be the ones who do really well out of this.”

Peter Crump will be speaking at the 2018 SMSF National Conference today – Wednesday, February 14 – in a session called “Contribution opportunities – nothing has changed, or has it?”